1.1 A bill for an act
1.2 relating to energy; requiring additional information in a public utility's resource
1.3 plan; directing public utilities to file a virtual power plant tariff and program with
1.4 the Minnesota Public Utilities Commission; providing for cost recovery; requiring
1.5 reports; amending Minnesota Statutes 2024, section 216B.2422, subdivision 2;
1.6 proposing coding for new law in Minnesota Statutes, chapter 216B.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2024, section 216B.2422, subdivision 2, is amended to read:
1.9 Subd. 2.Resource plan filing and approval.(a) A utility shall file a resource plan with
1.10the commission periodically in accordance with rules adopted by the commission. The
1.11commission shall approve, reject, or modify the plan of a public utility, as defined in section
1.12216B.02, subdivision 4, consistent with the public interest.
1.13 (b) In the resource plan proceedings of all other utilities, the commission's order shall
1.14be advisory and the order's findings and conclusions shall constitute prima facie evidence
1.15which may be rebutted by substantial evidence in all other proceedings. With respect to
1.16utilities other than those defined in section 216B.02, subdivision 4, the commission shall
1.17consider the filing requirements and decisions in any comparable proceedings in another
1.18jurisdiction.
1.19 (c) As a part of its resource plan filing, a utility shall include the least cost plan for
1.20meeting 50 and 75 percent of all energy needs from both new and refurbished generating
1.21facilities through a combination of conservation and renewable energy resources.
1.22 (d) A public utility must include in an integrated resource plan filing an estimate of (1)
1.23the reduction in the public utility's winter and summer system peak attributable to
1Section 1.
25-04891 as introduced03/26/25 REVISOR RSI/CH
SENATE
STATE OF MINNESOTA
S.F. No. 3209NINETY-FOURTH SESSION
(SENATE AUTHORS: MCEWEN)
OFFICIAL STATUSD-PGDATE
Introduction and first reading04/01/2025
Referred to Energy, Utilities, Environment, and Climate 2.1implementing a virtual power plant program approved under section 216B.2429, and (2)
2.2the cost of the virtual power plant program.
2.3 EFFECTIVE DATE.This section is effective the day following final enactment.
2.4 Sec. 2. [216B.2429] VIRTUAL POWER PLANT TARIFF AND PROGRAM.
2.5 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
2.6the meanings given.
2.7 (b) "Aggregator" means an entity that enters into a power purchase agreement to provide
2.8to a public utility electricity that is aggregated from eligible technology devices owned by
2.9utility customers enrolled in a virtual power plant program.
2.10 (c) "Demand response measure" has the meaning given to "load management" in section
2.11216B.2402.
2.12 (d) "Device" means a piece of equipment that is an eligible technology owned by a
2.13participant.
2.14 (e) "Distributed energy resource" means an eligible technology device that generates
2.15electricity and whose capacity does not exceed ten megawatts.
2.16 (f) "Eligible technology" means technology that is capable of being activated or
2.17dispatched under a virtual power plant program in order to address a grid event. Eligible
2.18technology includes but is not limited to:
2.19 (1) solar photovoltaic devices;
2.20 (2) energy storage systems;
2.21 (3) electric vehicles;
2.22 (4) smart thermostats;
2.23 (5) heat pumps; and
2.24 (6) demand response measures.
2.25 (g) "Energy storage system" has the meaning given in section 216B.2422, subdivision
2.261.
2.27 (h) "Greenhouse gas" means atmospheric emissions of carbon dioxide, methane, nitrous
2.28oxide, hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride.
2.29 (i) "Grid event" means a shortage of electricity supply that may be addressed by the
2.30dispatch or activation of devices enrolled in a virtual power plant program.
2Sec. 2.
25-04891 as introduced03/26/25 REVISOR RSI/CH 3.1 (j) "Grid system" means a public utility's interconnected network of electricity generators
3.2and transmission and distribution lines that deliver electricity to ultimate consumers.
3.3 (k) "Participant" means an owner of an eligible technology device enrolled in a virtual
3.4power plant program.
3.5 (l) "Peaker plant" means a power plant that operates to supplement electricity supply
3.6for short periods only during a system peak.
3.7 (m) "Performance-based compensation" means a system of payments made to participants
3.8and aggregators based on the value of the electricity dispatched or saved through activating
3.9demand response measures during a grid event.
3.10 (n) "Smart thermostat" means a thermostat that can be controlled remotely via the Internet.
3.11 (o) "Solar photovoltaic device" has the meaning given in section 216C.06, subdivision
3.1216.
3.13 (p) "System peak" means the period of time during which electricity demand on a grid
3.14system is highest.
3.15 (q) "Virtual power plant program" means a program that aggregates electricity from
3.16distributed energy resources and activates demand response measures to address grid events.
3.17 Subd. 2.Required filing; objectives; review.No later than ......., 2026, each public
3.18utility must file with the commission a virtual power plant tariff and program that are
3.19consistent with the requirements of this section and designed to achieve the following goals:
3.20 (1) reduce demand for grid-supplied electricity during system peaks;
3.21 (2) make renewable energy generated during off-peak periods available for use during
3.22system peaks;
3.23 (3) lower ratepayer bills by reducing utility market purchases at elevated prices during
3.24system peaks;
3.25 (4) reduce emissions of greenhouse gases and other air pollutants;
3.26 (5) optimize the use of existing generation and energy storage assets;
3.27 (6) improve the resiliency and reliability of the grid system;
3.28 (7) avoid or defer the construction of electric generation, distribution, or transmission
3.29infrastructure; and
3.30 (8) reduce the use of fossil-fuel-fired peaker plants.
3Sec. 2.
25-04891 as introduced03/26/25 REVISOR RSI/CH 4.1 Subd. 3.Content of tariff.(a) A virtual power plant tariff and program filed under this
4.2section must contain, at a minimum:
4.3 (1) a description of the goals of the virtual power plant program and the role the program
4.4plays in meeting the public utility's grid system needs;
4.5 (2) provisions to enroll and manage participants by aggregators and, if applicable, by
4.6the public utility directly;
4.7 (3) provisions to operate a virtual power plant program, including how the public utility
4.8communicates with aggregators and participants during a grid event; and
4.9 (4) provisions that, notwithstanding section 216B.164, participants must be compensated
4.10at the applicable rate established under the tariff for electricity exported to the public utility
4.11or demand reductions made during a grid event.
4.12 (b) The commission may require a virtual power plant tariff and program filed under
4.13this section to contain:
4.14 (1) provisions that describe how:
4.15 (i) performance measurement and performance verification data are delivered to the
4.16public utility;
4.17 (ii) performance-based compensation payments are calculated and issued by the public
4.18utility; and
4.19 (iii) disputes regarding performance-based compensation are settled;
4.20 (2) descriptions regarding how performance-based compensation is designed to reflect
4.21the full value of services at the specific locations where an eligible technology is utilized.
4.22The value must include, at a minimum:
4.23 (i) local and system peak demand reduction; and
4.24 (ii) avoiding or deferring transmission or distribution system upgrades or capacity
4.25expansion;
4.26 (3) provisions that prohibit a participant from being compensated for providing the same
4.27energy resources more than once;
4.28 (4) provisions to measure and verify energy storage system performance directly at the
4.29site of the energy storage system without requiring the installation of an additional meter;
4.30and
4.31 (5) operational parameters describing:
4Sec. 2.
25-04891 as introduced03/26/25 REVISOR RSI/CH 5.1 (i) the minimum and maximum numbers of annual grid events during which the public
5.2utility may dispatch or activate enrolled resources;
5.3 (ii) the months of the year during which grid events may occur;
5.4 (iii) the days of the week during which grid events may occur;
5.5 (iv) the times of the day during which grid events may occur;
5.6 (v) the maximum duration of grid events; and
5.7 (vi) the minimum advance notification of grid events to participants; and
5.8 (6) any other information the commission determines is necessary to efficiently operate
5.9a virtual power plant program.
5.10 Subd. 4.Other operational requirements.(a) An aggregator must enter into a power
5.11purchase agreement with a public utility in order to participate in a virtual power plant
5.12program.
5.13 (b) A public utility may serve as an aggregator.
5.14 (c) A public utility customer may enroll with an aggregator to participate in a virtual
5.15power plant program at the time the customer's distributed energy resource begins operations.
5.16 (d) A participant must not be excluded from enrollment in a virtual power plant program
5.17as a result of receiving financial incentives from the public utility for energy, capacity, or
5.18other grid services under other programs offered by the public utility.
5.19 (e) A public utility must not require collateral from a participant or aggregator as a
5.20requirement to participate in a virtual power plant program.
5.21 Subd. 5.Commission duties.(a) The commission may (1) approve, reject, or modify
5.22a virtual power plant tariff filed under this section, and (2) modify an approved tariff after
5.23notice and hearing.
5.24 (b) The commission must establish reasonable and appropriate standards to protect the
5.25interests of virtual power plant program participants. The standards may include requirements
5.26for registration forms, standard contract terms and conditions, payment terms, warranties,
5.27disclosure forms, and other requirements.
5.28 (c) The commission must establish standards and procedures governing energy data held
5.29by participants and public utilities that must be shared with aggregators in order to ensure
5.30a virtual power plant program's efficient operation. An aggregator must not sell or use, for
5Sec. 2.
25-04891 as introduced03/26/25 REVISOR RSI/CH 6.1any other purpose, data from participants or public utilities gathered for virtual power plant
6.2program use.
6.3 (d) The commission may establish financial performance incentives for public utilities
6.4that achieve the system peak reduction targets under subdivision 6.
6.5 (e) The commission must develop a process to amend performance-based compensation
6.6rates to use when amending performance-based compensation rates is warranted.
6.7 Subd. 6.System peak reduction targets.No later than 2028, a public utility, by
6.8implementing a virtual power plan and other programs designed to reduce the public utility's
6.9system peak energy demand, must reduce the public utility's winter and summer peaks by
6.10at least ten percent from the base year 2025. The commission must establish new targets
6.11for subsequent years, provided the targets are cost effective.
6.12 Subd. 7.Modification or delay.The commission may modify or delay a virtual power
6.13plant program's implementation if the commission determines doing so is in the public
6.14interest. When making a determination under this subdivision, the commission must consider
6.15whether the system peak reduction targets established under subdivision 6 are technically
6.16and economically feasible.
6.17 Subd. 8.Cost recovery.Notwithstanding any other provision of this chapter, the
6.18commission may approve cost recovery under section 216B.16, including an appropriate
6.19rate of return, for any prudent and reasonable investments made or expenses incurred by a
6.20public utility to administer and implement a virtual power plant program approved by the
6.21commission under this section.
6.22 Subd. 9.Report.Beginning January 31, 2028, and each January 31 thereafter, a public
6.23utility must file an annual report to the commission and to the chairs and ranking minority
6.24members of the senate and house of representatives committees with primary jurisdiction
6.25over energy policy. The report must include, at a minimum:
6.26 (1) the total capacity enrolled under the tariff approved by the commission under this
6.27section, reported separately by eligible technology type, customer class, and whether the
6.28participant operated under an aggregator or directly through the public utility;
6.29 (2) the system peak reduction attributable to the virtual power plant program;
6.30 (3) contributions to other grid services made by the virtual power plant program;
6.31 (4) recommendations to increase participation in the virtual power plant program; and
6.32 (5) other information requested by the commission.
6Sec. 2.
25-04891 as introduced03/26/25 REVISOR RSI/CH 7.1 EFFECTIVE DATE.This section is effective the day following final enactment.
7Sec. 2.
25-04891 as introduced03/26/25 REVISOR RSI/CH